Customer satisfaction is a crucial foundation for any business, including SMEs striving to grow amid competition.
With 48% of customers admitting they switch brands due to poor service experiences, you can no longer ignore how customers feel about your business. One way to monitor this is through CSAT, or Customer Satisfaction Score.
This tool is used by 88% of organizations worldwide as a key indicator to understand whether customers are satisfied with the service, products, and overall experience they receive.
However, measuring and improving CSAT isn’t just about sending a survey and waiting for the results. You need to understand what this metric means, how to calculate it, and most importantly, how to enhance it.
What Is Customer Satisfaction Score (CSAT)?
CSAT, or Customer Satisfaction Score, is a metric that indicates how satisfied customers are with a business, product, service, or interaction they experience.
CSAT is typically measured through surveys asking customers to rate their satisfaction on a specific scale, such as 1–5 or 1–10. A high score indicates that customers are satisfied, while a low score highlights issues that need to be addressed.
This metric is often used by businesses to monitor customer service quality, evaluate customer experiences, and identify areas that need improvement.
What Does a Good CSAT Score Look Like?
There is no universal benchmark that applies to all types of businesses. However, generally, a score of 70% or higher is considered an indicator that most customers are satisfied.
Even so, remember that a high score doesn’t mean everything is perfect. You still need to collect and analyze customer feedback to identify opportunities for improvement.
SME customers typically have simple expectations: they want to be served promptly, treated respectfully, and given clear responses. If you can meet these expectations, your CSAT scores are likely to remain stable and even improve.
How to Calculate the CSAT Score
Calculating CSAT is actually quite simple. You just need to:
- Send a short survey to your customers.
- Ask them to rate their level of satisfaction.
- Group the ‘positive’ responses, such as ‘Satisfied’ and ‘Very Satisfied’.
- Divide the number of positive responses by the total number of respondents.
- Multiply the result by 100 to convert it into a percentage.
For example, as follows:
Total respondents: 50 people
Positive responses: 35 people
Calculation: 35 ÷ 50 = 0.7 × 100 = 70%
This means that the majority of customers are satisfied, but there is still room for performance improvement.
Reasons Why You Should Measure Customer Satisfaction
Measuring CSAT offers numerous benefits, especially for SMEs looking to grow. Some of these benefits include:
1. Improving customer retention. Satisfied customers are more likely to make repeat purchases. This is much more cost-effective than acquiring new customers.
2. Building customer loyalty. Satisfied customers tend to stay longer and are more willing to recommend your business to others.
3. Improving the customer experience. By tracking your CSAT scores over time, you can identify areas of your business that need improvement.
4. Increasing sales. When customers feel valued, they not only make repeat purchases but also tend to buy more.
5. Enhancing your business reputation. SMEs that provide satisfying service tend to grow faster because customers leave positive reviews, especially on social media.
Advantages and Disadvantages of Monitoring Customer Satisfaction
Although CSAT is useful, you still need to understand its limitations and advantages to avoid drawing incorrect conclusions.
1. Advantages of Monitoring Customer Satisfaction
- The survey is short and easy for customers to complete.
- Provides a quick overview of what is working well and what needs improvement.
- When combined with other metrics like NPS or CES, the results become even more powerful.
- It can show customer satisfaction trends over time.
- It can be compared with industry standards to understand your business’s position.
2. Disadvantages of Monitoring Customer Satisfaction
- The results can be influenced by the customer’s emotions at the moment, not just the service.
- It does not always explain why customers feel satisfied or dissatisfied.
- Usually, only customers who are very satisfied or very dissatisfied respond to surveys, which can result in biased outcomes.
How to Improve Customer Satisfaction
If your business’s CSAT score has not yet reached the target or is unstable, you can try the following strategies. All of these strategies can be applied by any SME, whether in F&B, retail, services, or online shops.
1. Leverage AI to Streamline Service
Modern consumers are increasingly familiar with technology, and 81% of customers now expect AI to be part of customer service. AI can help you:
- Answer questions quickly.
- Reduce waiting times.
- Offer self-service options.
- Minimize customer queues.
You don’t need to create a complex system. Many CRM and CX platforms now offer ready-to-use AI features, including for SMEs.
2. Provide Proper Training for Your Service Team
Trained agents or staff will deliver a better customer experience. Teach them basic skills such as:
- Effective communication.
- How to handle complaints.
- How to calm customers.
- Thorough product knowledge.
Confident staff usually provide service that is friendlier, faster, and more accurate.
3. Communicate Waiting Times Transparently
Customers are more patient when they know the estimated wait time. For example, by providing responses like, ‘Your order is being processed and should be ready in 10 minutes,’ or ‘An admin will reply to your chat within 5 minutes.
This simple transparency can reduce customer frustration and improve their perception of your service.
4. Offer Self-Service Features
Self-service features are very effective for SMEs that often struggle to handle a large volume of messages. You can provide:
- An FAQ or help center.
- Product usage guides.
- Order tracking system.
- Automated complaint submission page.
When customers can resolve issues on their own, they feel more comfortable and satisfied.
Solutions to Improve Customer Satisfaction with Labamu Loyalty
To help SMEs improve customer retention and satisfaction, solutions like Labamu Loyalty can be highly effective. With Labamu’s features, you can manage loyalty programs easily without any technical expertise.
The advantages of Labamu Loyalty are:
- Encourage loyalty with personalized points and promotions.
- Manage rewards effortlessly as all processes are automated.
- Multichannel communication via email, WhatsApp, and SMS.
- Flexible rewards, ranging from discounts to free products.
- More targeted promotions, as they can be directed according to customer segments.
- Data is secure and transparent, allowing customers to check and redeem points directly at checkout.
A well-managed Labamu Loyalty program can help boost customer satisfaction while encouraging repeat purchases—both crucial for SME growth. Try it now!
So, don’t view customer satisfaction as just a number; it reflects how customers experience your business. By understanding CSAT, you can improve service quality while accelerating business growth.
